Foremost Dairies To Close Soon

Foremost Dairies Northwest is closing its Seattle milk-processing and bottling plant following the collapse of a deal that would have kept the plant open and saved 150 jobs. The closing also concentrates almost all of the local milk market in the hands of one processor - Darigold.

The sale of Foremost's property to Quality Food Centers Inc., which had been tentatively announced in March, is still possible, say spokesmen for both companies. However, the shutdown makes it unlikely that QFC would continue dairy operations. QFC has said it might build a grocery store at the site. Foremost is on eight acres adjacent to University Village, where QFC has a store.

"Some people's hopes are going to be dashed by this (closing)," said Marc Evanger, chief financial officer for QFC.

Foremost was forced into bankruptcy in February by creditors; the company has been in receivership since November. Now, it plans to shut down within 10 days.

According to Allan Thomas, one of about 100 Western Washington dairy farmers that supplied Foremost, the closing will give Darigold a virtual monopoly on milk processing in Western Washington. He said Darigold will have as much as 95 percent of the market after Foremost, which he said had 10 percent to 20 percent, closes. Vitamilk has a small chunk of the market, said Thomas.

Behind the shutdown, according to several sources, was a demand by a key Foremost creditor, U.S. Bank of Washington, that QFC decide quickly whether it would buy Foremost and operate the dairy.

Dan Szasz, who has acted as court-appointed receiver for Foremost since November, said U.S. Bank was concerned that Foremost's customers would start bailing out if QFC wouldn't guarantee it would continue to operate the dairy. "(U.S. Bank) wanted to cut the chord before the bleeding started," said Szasz.

U.S. Bank spokesman Jim Kroening wouldn't comment on why the bank forced the dairy to close. He said he was sorry that 150 people would lose their jobs.

Szasz told a King County Superior Court in January that Foremost owed U.S. Bank about $23 million, and 87 farmers $2.4 million.

Szasz said the company is seeking other milk distributors to take over Foremost's business to ensure customers don't notice any interruption in service.

Foremost served 1,300 customers regularly out of the Seattle plant; an additional 1,100 were served out of a plant in Portland, which is also closing.

Yesterday, Foremost announced it was selling its Spokane processing-and-bottling plant to Goodale & Barbieri, which will continue to operate it as a dairy.

Thomas, an Enumclaw dairy farmer whose family has worked with Foremost for the past 20 years, said he has talked to all the parties. "I believe U.S. Bank tried to strong-arm QFC into hurrying along its purchase," said Thomas.

But Szasz said the bank wanted a commitment that QFC would keep the dairy open, which QFC wasn't willing to immediately provide.

Szasz said one of his primary responsibilities is to protect Foremost's assets for the benefit of creditors such as U.S. Bank. "I had hoped to be able to save the jobs, too, by keeping it going as a dairy," said Szasz. "For the people losing jobs, it's a tragic situation."